Question 1

Complete the following table.

Accepted Answer

The answer of Complete the following table.
  ...

Question 2

Collusion between two firms occurs when

Accepted Answer

A) the firms independently pursue strategies that could hurt each other. 
B) firms explicitly or implicitly agree to adopt a uniform business strategy. 
C) announce that each will match its rival's market price. 
D) firms act altruistically to bring about the economically efficient outcome. 
A) the firms independently pursue strategies that could hurt each other. 
B) firms explicitly or implicitly agree to adopt a uniform business strategy. 
C) announce that each will match its rival's market price. 
D) firms act altruistically to bring about the economically efficient outcome.

Question 3

Marginal revenue for an oligopolist is

Accepted Answer

A) identical to the demand for the firm's product. 
B) difficult to determine because the firm's demand curve is typically unknown. 
C) downward sloping beneath the firm's demand curve. 
D) horizontal on a price-quantity diagram. 
A) identical to the demand for the firm's product. 
B) difficult to determine because the firm's demand curve is typically unknown. 
C) downward sloping beneath the firm's demand curve. 
D) horizontal on a price-quantity diagram.

Question 4

The barrier to entry that allowed Alcoa to make persistent economic profits was ownership of an essential input.

Accepted Answer

A) True 
 B)False

Question 5

Figure 11-6  
-Refer to Figure 11-6.What is the allocatively efficient output for the firm represented in the diagram?

Accepted Answer

A) Q1 units 
B) Q2 units 
C) Q3 units 
D) Q4 units 
A) Q1 units 
B) Q2 units 
C) Q3 units 
D) Q4 units

Question 6

For a monopolistically competitive firm,marginal revenue

Accepted Answer

A) equals the price. 
B) is greater than the price. 
C) is less than the price. 
D) and price are unrelated. 
A) equals the price. 
B) is greater than the price. 
C) is less than the price. 
D) and price are unrelated.

Question 7

Figure 11-4  
-Refer to Figure 11-4.The candy store represented in the diagram is currently selling Qa units of candy at a price of Pa.Is this candy store maximizing its profit and if it is not,what would you recommend to the firm?

Accepted Answer

A) Yes,it is maximizing its profit by charging the highest price possible. 
B) No,it is not;since its marginal cost is constant,it should produce and sell as much candy as it can.It should sell Qd units at a price of Pd. 
C) No,it is not;it should lower its price to Pc and sell Qc units. 
D) No,it is not;it should lower its price to Pb and sell Qb units. 
A) Yes,it is maximizing its profit by charging the highest price possible. 
B) No,it is not;since its marginal cost is constant,it should produce and sell as much candy as it can.It should sell Qd units at a price of Pd. 
C) No,it is not;it should lower its price to Pc and sell Qc units. 
D) No,it is not;it should lower its price to Pb and sell Qb units.

Question 8

Which of the following is important in determining the extent of competition in an industry?

Accepted Answer

A) the minimum level of short run average total costs of production 
B) the minimum efficient scale of production relative to market demand 
C) whether or not the industry product is differentiated or standardized 
D) the level of market demand for the industry's product 
A) the minimum level of short run average total costs of production 
B) the minimum efficient scale of production relative to market demand 
C) whether or not the industry product is differentiated or standardized 
D) the level of market demand for the industry's product

Question 9

Which of the following economists did not help to develop game theory analysis?

Accepted Answer

A) Adam Smith 
B) John Nash 
C) John von Neumann 
D) Oskar Morgenstern 
A) Adam Smith 
B) John Nash 
C) John von Neumann 
D) Oskar Morgenstern

Question 10

A set of actions that a firm takes to achieve a goal,such as maximizing profits,is called

Accepted Answer

A) a business strategy. 
B) a payoff matrix. 
C) the Porter's Competitive Forces plan. 
D) game theory. 
A) a business strategy. 
B) a payoff matrix. 
C) the Porter's Competitive Forces plan. 
D) game theory.

Question 11

Figure 11-6  
-Refer to Figure 11-6.What is the monopolistic competitor's profit maximizing price?

Accepted Answer

A) P1 
B) P2 
C) P3 
D) P4 
A) P1 
B) P2 
C) P3 
D) P4

Question 12

A monopolistically competitive firm will

Accepted Answer

A) charge the same price as its competitors do. 
B) always produce at the minimum efficient scale of production. 
C) have some control over its price because its product is differentiated. 
D) produce an output level that is productively and allocatively efficient. 
A) charge the same price as its competitors do. 
B) always produce at the minimum efficient scale of production. 
C) have some control over its price because its product is differentiated. 
D) produce an output level that is productively and allocatively efficient.

Question 13

An example of a barrier to entry is

Accepted Answer

A) product differentiation. 
B) high profits. 
C) superior technological knowledge. 
D) increasing marginal costs 
A) product differentiation. 
B) high profits. 
C) superior technological knowledge. 
D) increasing marginal costs

Question 14

An equilibrium in which each player chooses its best strategy given the strategies chosen by the other players is called a Nash equilibrium.

Accepted Answer

A) True 
 B)False

Question 15

If marginal revenue is negative then the revenue lost from receiving a lower price on all the units that could have been sold at the original price is smaller than the additional revenue from selling one more unit of the good.

Accepted Answer

A) True 
 B)False

Question 16

Table 11-5   Table 11-5 shows the payoff matrix for Wal-Mart and Target from every combination of pricing strategies for the popular PlayStation 3.At the start of the game each firm charges a low price and each earns a profit of $7,000.
-Refer to Table 11-5.Suppose Wal-Mart and Target both advertise that they will match the lowest price offered by any competitor.What is the purpose of such a strategy?

Accepted Answer

A) to signal to each other not to charge below the current low price 
B) to signal to each other that they will not hesitate to initiate a price war 
C) to signal to each other that they intend to charge the high price 
D) to signal to each other to share the market equally 
A) to signal to each other not to charge below the current low price 
B) to signal to each other that they will not hesitate to initiate a price war 
C) to signal to each other that they intend to charge the high price 
D) to signal to each other to share the market equally

Question 17

Figure 11-12  
-Refer to Figure 11-12.Which of the following statements is true?

Accepted Answer

A) Da represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the demand curve in the short run. 
B) Da represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the long-run demand curve in an increasing-cost industry. 
C) Da represents the long-run demand curve facing a perfect competitor while Db depicts the long-run demand curve facing a monopolistic competitor. 
D) Da represents the long-run supply curve in a perfectly competitive,constant-cost industry while Db depicts the long-run demand curve facing a monopolistic competitor in a decreasing-cost industry. 
A) Da represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the demand curve in the short run. 
B) Da represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the long-run demand curve in an increasing-cost industry. 
C) Da represents the long-run demand curve facing a perfect competitor while Db depicts the long-run demand curve facing a monopolistic competitor. 
D) Da represents the long-run supply curve in a perfectly competitive,constant-cost industry while Db depicts the long-run demand curve facing a monopolistic competitor in a decreasing-cost industry.

Question 18

Table 11-6   Suppose OPEC has only two producers,Saudi Arabia and Nigeria.Saudi Arabia has far more oil reserves and is the lower cost producer compared to Nigeria.The payoff matrix in Table 11-6 shows the profits earned per day by each country."Low output" corresponds to producing the OPEC assigned quota and "high output" corresponds to producing the maximum capacity beyond the assigned quota.
-Refer to Table 11-6.Is there a dominant strategy for Nigeria and,if so,what is it?

Accepted Answer

A) Yes,it has a dominant strategy depending on what Saudi Arabia does. 
B) No,there is no dominant strategy. 
C) Yes,the dominant strategy is to produce a low output. 
D) Yes,the dominant strategy is to produce a high output. 
A) Yes,it has a dominant strategy depending on what Saudi Arabia does. 
B) No,there is no dominant strategy. 
C) Yes,the dominant strategy is to produce a low output. 
D) Yes,the dominant strategy is to produce a high output.

Question 19

Figure 11-6  
-Refer to Figure 11-6.What is the monopolistic competitor's profit maximizing output?

Accepted Answer

A) Q1 units 
B) Q2 units 
C) Q3 units 
D) Q4 units 
A) Q1 units 
B) Q2 units 
C) Q3 units 
D) Q4 units

Question 20

Table 11-3
   Table 11-3 shows the demand and cost schedules for a monopolistically competitive firm.
-Refer to Table 11-3.If this firm continues to produce,what is likely to happen to the product's price in the long run?

Accepted Answer

A) It will fall. 
B) It will increase 
C) It will remain constant. 
D) It cannot be determined without information on its long run demand curve. 
A) It will fall. 
B) It will increase 
C) It will remain constant. 
D) It cannot be determined without information on its long run demand curve.

Complete the following table.

Collusion between two firms occurs when

Marginal revenue for an oligopolist is

The barrier to entry that allowed Alcoa to make persistent economic profits was ownership of an essential input.

Figure 11-6 -Refer to Figure 11-6.What is the allocatively efficient output for the firm represented in the diagram?

For a monopolistically competitive firm,marginal revenue

Figure 11-4 -Refer to Figure 11-4.The candy store represented in the diagram is currently selling Qa units of candy at a price of Pa.Is this candy store maximizing its profit and if it is not,what would you recommend to the firm?

Which of the following is important in determining the extent of competition in an industry?

Which of the following economists did not help to develop game theory analysis?

A set of actions that a firm takes to achieve a goal,such as maximizing profits,is called

Figure 11-6 -Refer to Figure 11-6.What is the monopolistic competitor's profit maximizing price?

A monopolistically competitive firm will

An example of a barrier to entry is

An equilibrium in which each player chooses its best strategy given the strategies chosen by the other players is called a Nash equilibrium.

If marginal revenue is negative then the revenue lost from receiving a lower price on all the units that could have been sold at the original price is smaller than the additional revenue from selling one more unit of the good.

Figure 11-12 -Refer to Figure 11-12.Which of the following statements is true?

Figure 11-6 -Refer to Figure 11-6.What is the monopolistic competitor's profit maximizing output?

Table 11-3 Table 11-3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 11-3.If this firm continues to produce,what is likely to happen to the product's price in the long run?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

Filters

Exam 11: Monopolistic Competition and Oligopoly

Complete the following table.

Collusion between two firms occurs when

Marginal revenue for an oligopolist is

The barrier to entry that allowed Alcoa to make persistent economic profits was ownership of an essential input.

Figure 11-6 -Refer to Figure 11-6.What is the allocatively efficient output for the firm represented in the diagram?

For a monopolistically competitive firm,marginal revenue

Figure 11-4 -Refer to Figure 11-4.The candy store represented in the diagram is currently selling Qa units of candy at a price of Pa.Is this candy store maximizing its profit and if it is not,what would you recommend to the firm?

Which of the following is important in determining the extent of competition in an industry?

Which of the following economists did not help to develop game theory analysis?

A set of actions that a firm takes to achieve a goal,such as maximizing profits,is called

Figure 11-6 -Refer to Figure 11-6.What is the monopolistic competitor's profit maximizing price?

A monopolistically competitive firm will

An example of a barrier to entry is

An equilibrium in which each player chooses its best strategy given the strategies chosen by the other players is called a Nash equilibrium.

If marginal revenue is negative then the revenue lost from receiving a lower price on all the units that could have been sold at the original price is smaller than the additional revenue from selling one more unit of the good.

Figure 11-12 -Refer to Figure 11-12.Which of the following statements is true?

Figure 11-6 -Refer to Figure 11-6.What is the monopolistic competitor's profit maximizing output?

Table 11-3 Table 11-3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 11-3.If this firm continues to produce,what is likely to happen to the product's price in the long run?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

Filters